Zuckerberg Testimony Will Change Advertising

One of the most amusing aspects of watching Mark Zuckerberg testify before Congress was the wide-ranging knowledge or lack thereof about Facebook ads, and about digital advertising in general. While Zuckerberg sat there for almost two days trying to answer questions completely and explain complex subjects, such as artificial intelligence and the extent it can be useful in detecting fake accounts or fake news, many of the senators and representatives, playing for the galleries, kept asking “gotcha”-type questions that they wanted answered yes or no.

But the big issues, after the Congressional committees got off the initial subject of Facebook Analytica, revolved around selling and collecting data. Most of the questions revealed that Congress actually thought Facebook sold user data, when what it sells is really the ability to target ads narrowly using the data it possesses. Zuck tried to explain and define that several times. This sounds like a minor point, but it is a big distinction that differentiates Facebook from data brokers, and it seemed the one Congress was most focused on after it received assurances that  Cambridge Analytica can’t happen again because the platform is locked down for developers.

For our industry, the other big questions were about the gathering and retention of data. I lost track of how many times committee members asked how soon it would be possible to delete their data. In vain he told them over and over that the feature already existed.  Then, they asked him why the deletion couldn’t take place immediately. But when he began to explain backup servers and why data could be held for a week or two after the account was deleted, they lost interest in the details.

Legislators also asked Zuckerberg about new data protection regulations that are about to go into effect in Europe May 25, and whether Facebook would comply. He said they were already set up to comply. When asked whether American users would get the same protections, Zuckerberg said they would, because Facebook was rolling out GDPR protections globally. But then he was asked whether that would happen on May 25, and he said no.

This hearing opened a big can of worms for the digital advertising industry, or at least for companies that collect and handle user data to be used for advertising. Many larger companies have already begun to comply with GDPR and it would be very difficult  if the US Congress decides to adopt  different set of regulations. That doesn’t seem likely in the near term, as Congress can’t agree on how to regulate these companies, many whom have armies of lobbyists.

Zuckerberg said Facebook was open to regulation, but that the devil was in the details and he’d be glad to be involved in helping Congress regulate the use of personally identifiable information. Of course Facebook has the resources to devote to this.

Zuckerberg may be the visible whipping boy, but whatever is enacted will affect all internet companies that keep data. Look for the rebirth of advertising based on context and content, much like TV ads.